Q4 2024 WELL Health Technologies Corp Earnings Call
Operator: Welcome to the WELL Health Technologies Corp. 4th Quarter 2024. and Fiscal Year 2024 Financial Results Conference Call.
Welcome to the World Health Technologies Corp, fourth quarter 2024.
Kim: And fiscal year 2024 financial results Conference call. My name is Kim and I will be your operator for today's call. At this time all participants are in listen only mode. We will conduct a question and answer session later in the call, which will be restricted to analysts.
Operator: My name is Kim, and I will be your operator for today's call. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session later in the call, which will be restricted to analysts only. Please note that this conference is being recorded.
Kim: Only please note that this conference is being recorded.
Tyler Baba: I will now turn the call over to Tyler Baba, Manager Investor Relations. Mr. Baba, you may begin.
Speaker Change: I will now turn the call over to Tyler Pavlova manager of Investor Relations. Mr. Baber, you may begin.
Tyler Baba: Thank you, Operator, and welcome everyone to WELL Health's fiscal fourth quarter and full year 2024 financial results conference call.
Speaker Change: Thank you operator, and welcome everyone to well how fiscal fourth quarter and full year 2024 financial results Conference call.
Tyler Baba: for the three months and full year ended December 31st, 2020.
Mr. Baber: For the three months and full year ended December 31 2024.
Tyler Baba: Joining me on the call today are Hamed Shahbazi, Chairman and CEO, and Eva Fong, the company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws, including future-oriented financial information and financial outlook information. These forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors, many of which are outside of WELL's control, that may cause the actual results, performance, or achievements of WELL to differ materially from the anticipated results, performance, or achievements implied by such forward-looking statements.
Speaker Change: Joining me on the call today are how much <unk>, chairman and CEO and <unk> the Companys CFO.
Speaker Change: I Trust that everyone has received a copy of our financial results press release that was issued earlier today.
Speaker Change: On today's call other than historical performance include statements of forward looking information within the meaning of applicable securities laws, including future oriented financial information and financial outlook information.
Speaker Change: These forward looking statements involve known and unknown risks uncertainties assumptions and other factors many of which are outside of wells control that may cause the actual results performance or achievements of well to differ materially from the anticipated results performance or achievements implied by such forward looking statements.
Tyler Baba: These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based, except if it is required by securities law.
Speaker Change: These factors are further outlined in today's press release and in our management discussion and analysis.
Speaker Change: We provide forward looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future.
Speaker Change: We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward looking statements to reflect any change in our expectations or any change in events conditions assumptions or circumstances on which any such statement is based except if it if it is required by securities law.
Tyler Baba: We may use terms such as Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Shareholder EBITDA, Adjusted Net Income, and Adjusted Free Cash Flow Attributable to Shareholders on this conference call, all of which are non-GAAP and non-IFRS terms. For more information on how we define these terms, please refer to the definitions set out in today's press release and in our management discussion and analysis. The company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations, which the company can use to fund working capital requirements, service future interest and principal debt repayments, and fund future growth initiatives.
Speaker Change: We may use terms such as adjusted gross profit adjusted gross margin adjusted EBITDA adjusted shareholder EBITDA adjusted net income and adjusted free cash flow available attributable to shareholders. On this conference call all of which are non-GAAP and non <unk> measures for more information on how we define these terms.
Speaker Change: Please refer to the definitions set out in todays press release and in our management's discussion and analysis.
Speaker Change: The company believes that adjusted EBITDA is a meaningful financial metric as it measures.
Speaker Change: Cash generated from operations, which the company can use to fund working capital requirements service future interest and principal debt repayments and fund future growth initiatives adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with <unk> and with that let me turn the call over to Mr. <unk> <unk> Chairman and.
Tyler Baba: Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS.
Hamed Shahbazi: And with that, let me turn the call over to Mr. Hamed Shahbazi, Chairman and CEO. Thank you, Tyler. Good day, everyone. We appreciate everyone for joining us today as we discuss our Q4 and annual 2024 financial results. Before we get into our discussion, I'd like to address two exceptional items that impacted our 2024 results, which impacted two of our U.S. subsidiaries, one Circle Medical, which is a non-wholly owned subsidiary, and CRH Medical, which is wholly owned.
Speaker Change: <unk> CEO.
Speaker Change: Thank you Tyler and good day, everyone. We appreciate everyone for joining us today as we discuss our Q4 and annual 2024 financial results before we get into our discussion I'd like to address two exceptional items that impacted our 2024 results, which impacted two of our U S subsidiaries, one circle medical which is.
Speaker Change: A non wholly owned subsidiary in CRH medical which is wholly owned let's start with circle medical first.
Hamed Shahbazi: Let's start with Circle Medical first. As previously disclosed just a couple of weeks ago on March 29th, Circle Medical received a request from U.S. regulators investigating certain of Circle Medical's billing practices in the United States. In the annual consolidated financial statements for the year ended December 31, 2024, the company recognized an expense of 2.8 million U.S. dollars for the year ended December 31, 2024, for estimated settlement costs on its audited financial statement. As the company was finalizing its annual filings for fiscal 2024, it was determined that Circle Medical had billed and received payment for patient services that had been delivered during 2024 for which had not yet met all of the required criteria to recognize such revenue under applicable IFRS standards.
Speaker Change: As previously disclosed just a couple of weeks ago on March 29th Circle Medical received a request from U S regulators investigating certain of circle medicals billing practices in the United States.
Speaker Change: In the annual consolidated financial statements for the year ended December 31, 2024, the company recognized in.
Speaker Change: <unk> expense of $2 8 million U S dollars for the year ended December 31, 2024 for estimated settlement costs on its audited financial statements.
As the company was finalizing its annual filings for 'twenty fiscal 2024. It was determined that circle medical had build and received payment for patient services that had been delivered during 2024, four which had not yet met all of the required criteria to recognize such revenue under applicable Ifr standards.
Hamed Shahbazi: As a result, the company has recorded a revenue reduction of $56.6 million for fiscal 2024 and recognized cash received from customers of $53.9 million as deferred revenue as at year end. The company expects to recognize substantially all of this deferred revenue during fiscal 2025, with the remainder recognized in fiscal 2026. As of April 11th, 2025. WELL has already satisfied the criteria for revenue recognition in fiscal 2025 for approximately $6.7 million of this deferred revenue. The company expects to recognize substantially all of this deferred revenue during fiscal 2025 with the remainder in 26. April 14th, as I mentioned, we've recognized already 12% of this deferred revenue.
Speaker Change: As a result, the company has recorded a revenue reduction of $56 6 million for fiscal 2024 and recognized cash received from customers of $53 9 million as deferred revenue as at year end.
Speaker Change: The company expects to recognize substantially all of this deferred revenue during fiscal 2025 with the remainder recognized in fiscal 2026.
Speaker Change: As of April 11th 2025.
Speaker Change: Well has already satisfied the criteria for revenue recognition in fiscal 2025 for approximately $6 7 million of this deferred revenue.
Speaker Change: The company expects to recognize substantially all of this deferred revenue during fiscal 2025 with the remainder in 2006.
Speaker Change: As of.
Speaker Change: April 14th as I mentioned, we've recognized already 12% of this deferred revenue.
Hamed Shahbazi: Note that when the revenue is recognized, there won't be any costs recognized against this revenue resulting in full contribution to adjusted EBITDA in 2025. Therefore, we expect a significant boost in our reported adjusted EBITDA in 2025, and that has been embedded in our guidance. I want to stress here that all the revenue that is being deferred is related to patient care that was already delivered in 2024. It is expected that we will not lose any revenue here. Circle Medical had thousands of patient visits in 2024 where we provided care for patients related to these patient visits.
Speaker Change: Note that when the revenue is recognized.
Speaker Change: There won't be any costs recognized against this revenue, resulting in full contribution to adjusted EBITDA in 2025, Therefore, we expect a significant boost in our.
Speaker Change: Our reported adjusted EBITDA in 2025 and that Hasnt been embedded in our guidance.
Speaker Change: Want to stress here that all the revenue that is being deferred is related to patient care that was already delivered in 2024. It is expected that we will not lose any revenue here circle medical has thousands of patient visits in 2024.
Speaker Change: But where we provided care for patients related to these patient visits we build for them and consequently receive payment for them. The impact is a revenue recognition policy, where a portion of circle's revenue is being deferred to the future, even though the delivery and payment happened in 2024.
Hamed Shahbazi: We billed for them and consequently received payment for them. The impact is a revenue recognition policy where a portion of Circle's revenue is being deferred to the future, even though the delivery and payment happened in 2024. And we are seeing revenue and EBITDA decline in 2024, but we'll have the positive impact of increasing both revenue and EBITDA. Accordingly, in 2025.
Speaker Change: and we are seeing revenue in EBITDA decline in 2024, but we'll have the positive impact of increasing both revenue and EBITDA accordingly in 2025.
Hamed Shahbazi: The billing errors relate only to Circle Medical and have no effect on the rest of WELL's business. Circle Medical has since made changes to its billing practices and revenue recognition policies to remediate the issues causing this deferral.
Speaker Change: The billing errors relate only to circle medical and have no effect on the rest of WELL's business. Circle medical has since made changes to its billing practices and revenue recognition policies to remediate the issues causing this deferral.
Hamed Shahbazi: As previously disclosed, we had initiated a process last year to seek strategic alternatives for Circle Medical. The company is committed to carrying out this process in due course. I'll discuss this further later on in the call.
Speaker Change: As previously disclosed, we had initiated a process last year to seek strategic alternatives for circle medical. The companies committed to carrying out this process in due course, all discussed this further later on in the call.
Hamed Shahbazi: And now an update on the Change Healthcare cybersecurity impact on CRH. As previously discussed last year, CRH Anesthesia's primary billing partner, Change Healthcare, experienced a cybersecurity attack in February of 2024, which sidelined the Change Healthcare Revenue Cycle Management Service relied upon by the company for billings and collections. This resulted in the company experiencing delayed billing and cash collections on claims process for several months during 2024.
Speaker Change: And now an update on change, the change healthcare cybersecurity impact on CRH.
As previously discussed last year, CRH Anesthesia's Primary Billing Partner
Speaker Change: The Revenue Cycle Management Service relied upon by the company for Billings and Collections. This resulted in the company experiencing delayed billing and cash collections on claims process for several months during 2024.
Hamed Shahbazi: Due to this business interruption affecting a significant number of healthcare companies across the United States which rely on Change Healthcare for revenue collection. Change Healthcare's affiliate provided advanced funding to many of its customers, including CRH, in lieu of the cash collections CRH would normally receive related to these claims. During the fourth quarter of 2024, CRH updated key assumptions in its revenue recognition model related to the change healthcare cyber attack and determined that it would delay the recognition of approximately $24.5 million Canadian dollars of revenue in the fourth quarter of 2024 that otherwise would have been recognized during 2024 had the cyber attack not occurred.
Speaker Change: Due to this business interruption affecting a significant number of health care companies across the United States, which rely on change health care for revenue collection.
Speaker Change: Change Health Care's affiliate provided advanced funding to many of its customers, including CRH, in lieu of the cash collections, CRH would normally receive related to these claims.
Speaker Change: During the fourth quarter of 2024, CRH updated key assumptions in its revenue recognition model related to the change healthcare cyber attack and determined that it would delay the recognition of approximately 24.5 million Canadian dollars of revenue in the fourth quarter of 2024 that otherwise would have been recognized during 2024 had the cyber attack not occurred.
Hamed Shahbazi: CRH expects to recognize these revenues if and when collections from patients and third-party payers occur and when settlement terms have been reached with change healthcare. Once this occurs, such earnings will result in almost 100% contribution to adjusted EBITDA.
Speaker Change: CRH expects to recognize these revenues if and when collections from patients and third party payers occur and when settlement terms have been reached with change health care.
Speaker Change: Once this occurs, such earnings will result in almost 100% contribution to adjusted EBITDA. Due to the uncertainty regarding the timing and the amount that will be recovered, this has been excluded from our 2025 guidance.
Hamed Shahbazi: Due to the uncertainty regarding the timing and the amount that will be recovered, this has been excluded from our 2025 guidance.
Hamed Shahbazi: Notwithstanding to our revenue from the Circle Medical Revenue Deferral and the Change Healthcare Cyber Attack Matters, we're very proud of our overall achievements in 2024. Simply put, the fundamentals and outlook of our business have never been stronger. Despite these two IFRS revenue impacts, WELL delivered record annual revenue and free cash flow attributable to shareholders in fiscal 2024. WELL achieved annual revenue of $919.7 million in 2024, an increase of 19% compared to the prior year. As you can see here, revenue was negatively impacted by a delay in the recognition of earnings related to Circle Medical and CRH in the amounts of $56.6 million and $24.5 million respectively.
Speaker Change: Notwithstanding to our revenue from the Circle Medical Revenue Deferral and the Change Health Care Cyber Attack Matters, we're very proud of our overall achievements in 2024.
Speaker Change: Simply put, the fundamentals and outlook of our business have never been stronger despite these two IFRS revenue impacts.
Speaker Change: well-delivered record annual revenue and free cashflow attributable to shareholders in fiscal
Speaker Change: Well achieved annual revenue of 919.7 million in 2024, an increase of 19 percent.
Speaker Change: Compared to the prior year. As you can see here, revenue was negatively impacted by a delay in the recognition of earnings related to circle medical and CRH in the amount of 56.6 million and 24.5 million respectively.
Hamed Shahbazi: All of the Deferred Circle Medical Revenue is expected to be recognized, as I mentioned earlier in 2025, and the CRH revenues will be considered recognized once collected or earned as other income when terms are confirmed with changed health care.
Speaker Change: All of the deferred circle medical revenues expected to be recognized as I mentioned earlier in 2025, and the CRA revenues will be considered recognized once collected or earned as other income when terms are confirmed with change healthcare.
Hamed Shahbazi: Excluding such impacts, the company was on track to achieve record revenue of $1 billion Canadian in 2024, which has been a clear beat on our consensus results and reflected an increase of 29% as compared to the prior year. We think it's important for shareholders to be aware of this, as WELL Management has a culture of being highly accountable to its guidance and excluding the two IFRS revenue impacts we had beaten against. As you can see here, as a result of revenue recognition delays related to Circle Medical and CRH, our adjusted EBITDA in 2025 was $46.7 million as compared to adjusted EBITDA of $113.4 in 2023.
Speaker Change: Excluding such impacts, the company was on track to achieve record revenue of $1 billion Canadian in 2024, which had it being a clear beat on our consensus results and reflected an increase of 29% as compared to the prior year.
Speaker Change: We think it's important for shareholders to be aware of this as, well, management has a culture of being highly accountable to its guidance and excluding the two IFRS revenue impacts we had beaten again.
Speaker Change: As you can see here, as a result of revenue recognition delays related to circle medical and CRH are adjusted EBITDA in 2025 with 46.7 million as compared to adjusted EBITDA, 113.4 in 2023.
Hamed Shahbazi: Adjusted EBITDA was impacted by $56.6 million as a result of the Circle Medical revenue deferral and $23.8 million as a result of the revenue deferral delay, pardon me, related to the Change Healthcare Cybertax. Although Circle Medical contributed a net loss to consolidated income and only contributed 2.7% to the company's consolidated adjusted EBITDA in 2023, under IFRS for fiscal 2024, the company is required to recognize 100% of the expenses related to the $56.6 million that was deferred, which resulted in a significant reduction in adjusted EBITDA for fiscal 2024. And pause a significant positive contribution to adjusted EBITDA for fiscal 2025 once the deferred revenue is recognized.
Speaker Change: The Justice Division was impacted by $56.6 million as a result of the Circle Medical Revenue Deferral, and $23.8 million as a result of the revenue deferral delay, pardon me, related to the Change Health Care Cyber Attack.
Speaker Change: All those circle medical contributed in that loss to consolidated income and only contributed 2.7% to the company's consolidated adjusted EBITDA in 2023. Under IFRS for fiscal 2024, the company is required to recognize 100% of the expenses related to the 56.6 million that was deferred, which resulted in a significant reduction in the adjusted EBITDA for fiscal 2024.
Speaker Change: Pause a significant positive contribution to adjust the EBITDA for fiscal 2025, once the deferred revenue is recognized.
Hamed Shahbazi: The graph on the right shows, excluding the impacts from these two matters, adjusted EBITDA would have been $127 million, an increase of 12% as compared to 2023, which is within the range of our previously provided annual guidance. for 2024.
Speaker Change: The graph on the right shows excluding the impacts from these two matters, adjusted EBITDA would have been 127 million and increase of 12 percent as compared to 2023, which is within the range of our previously provided annual guidance.
Hamed Shahbazi: The company continues to seek strategic alternatives for Circle Medical, and we are committed to carrying out this process. Again, we will discuss this further.
Speaker Change: for 2024. The company continues to seek strategic alternatives for circle medical and we are committed to carrying out this process. Again, we will discuss this further.
Hamed Shahbazi: This slide shows some of our key annual financial highlights. For fiscal 2024, we achieved net income of $29.1 million, representing 75% year-over-year growth, compared to $16.6 million in 2023. Free cash flow attributable to shareholders was $49.3 million in 2024, an increase of 16% as compared to the prior year. We were trending to be higher than $50 million in free cash flow, but had more significant capex at the end of the year, as we had suggested could happen in our Q3 conference call. On a per-share basis, free cash flow attributable to shareholders was $0.20 per share.
This slide shows some of our key annual financial highlights.
Speaker Change: For fiscal 2024, we achieved net income of 29.1 million, representing 75% year-over-year growth compared to 16.6 million in 2023.
Speaker Change: Free cash flow attributable to shareholders was 49.3 million in 2024 and increases 16% as compared to the prior year.
Speaker Change: We were trending to be higher than 50 million in free cash flow, but had more significant cat-bex at the end of the year as we had suggested could happen in our Q3 conference call. On a per share basis free cash flow attributable to shareholders was 20 cents per share.
Hamed Shahbazi: Our Canadian business continues its strong momentum with 30% year-over-year growth and 20% year-over-year organic growth. And our Just a Deeper Dive Canada grew 22% year-over-year to $56 million.
Speaker Change: Our Canadian business continues its strong momentum with 30% year-over-year growth and 20% year-over-year organic growth, and our just-a-deep-a-done Canada grew 22% year-over-year to 56 million.
Hamed Shahbazi: I will now share with you some of our operational highlights for 2024. As at the end of Q4 2024, WELL had over 4,100 providers and clinicians delivering care across our entire network of physical and virtual clinics. Of that number, I'm proud to announce that we have now have over 2,500 providers within well-owned clinics in Canada, which includes approximately 1,000 physicians, which is over 1% of all physicians practicing in the country.
Speaker Change: I will now share with you some of our operational highlights for 2024, and at the end of Q4 2024, we will have over 4,100 providers and clinicians delivering care across our entire network of physical and virtual clinics.
Speaker Change: of that number. I'm proud to announce that we have now have over 2,500 providers within well-owned clinics in Canada, which includes approximately 1,000 physicians, which is over 1% of all physicians practicing in the country.
Hamed Shahbazi: We have a tremendous runway to continue to expand our footprint across Canada. In addition, there are more than 41,000 providers benefiting from our SAS and technology services, most of which are physicians. We estimate that well over 40 percent of all physicians in Canada touch our WellSTAR technology platform in some way. As we enhance our digital offerings and provide leading AI products and services, we can see the increasing importance, relevance and role that our company is playing in the country's health care ecosystem.
Speaker Change: We have a tremendous runway to continue to expand our footprint across Canada.
Speaker Change: In addition, there are more than 41,000 providers benefiting from our SAS and technology services most of which are physicians.
Speaker Change: We estimate that well over 40% of all physicians in Canada touch our well-starred technology platform in some way.
Speaker Change: As we enhance our digital offerings and provide leading AI products and services, we can see the increasing importance, relevance, and role that our company is playing in the country's healthcare ecosystem, and we're determined to make a positive impact.
Hamed Shahbazi: And we're determined to make a positive impact.
Hamed Shahbazi: Looking at our patient visits. As our revenues are generally underpinned by patient visits, as such, it's very important to track them, especially in this quarter, as we are experiencing some delays in revenue recognition under IFRS. We delivered 5.7 million patient visits in 2024, a 32% year-over-year increase from the prior year, with strong organic growth of 30%. These results demonstrate our strong fundamentals and unique platform, which is winning in the marketplace. Canadian patient visit metrics continue to demonstrate that this is one of the most prominent growth drivers of the company as visits grew by 35% year over year with organic growth at 32% inclusive of absorptions and same clinic growth.
Looking at our patient visits.
As Our Revenue
Speaker Change: Revenue is are generally underpinned by patient citizens, that's such it's very important to track them, especially in this quarter, as we are experiencing some delays in revenue recognition under IFRS. We delivered 5.7 million patient visits in 2024, a 32% year of year increased from the prior year with strong organic growth of 30%.
Speaker Change: These results demonstrate our strong fundamentals and unique platform which is winning in the marketplace.
Speaker Change: Canadian patient visit metrics continue to demonstrate that this is one of the most prominent growth drivers of the company as visits crew by 35% year-over-year with organic growth at 32% inclusive of absorptions and same clinic growth.
Hamed Shahbazi: U.S. patient visits grew by 28% year-over-year with all of it related to organic growth. Total care interactions, which is defined as total patient visits plus technology interactions plus biller provider hours, were over 8.7 million in 2024, which was a 37% increase as compared to the last year and represented 34% organic growth.
Speaker Change: U.S. Patient Business Group by 28% year-over-year with all of it related to organic growth.
Speaker Change: Total Care Interactions, which is defined as Total Patients Visits Plus Technology Interactions, Plus Biller Provider Hours were over 8.7 million in 2024, which was a 37% increase for as compared to the last year and represented 34% organic growth.
Hamed Shahbazi: Turning to our guidance for 2025, WELL is expecting its strong fundamentals and operational performance to continue into 2025 with a greater focus on leveraging all the product and corporate synergies it has access to, given its depth of product and technology at WellSTAR and now HealWell. Moreover, the company continues to focus the substantial majority of its M&A and capital allocation activity in Canada, where it is experiencing its strongest returns. Management will continue to pursue its focus on optimizing its operations for organic growth and profitability.
Turning to our guidance for 2025.
Hamed Shahbazi: With that, WELL is pleased to provide a positive outlook for 2025 with annual revenue guidance of between 1.4 and 1.45 billion For Adjusted EBITDA, we're providing annual guidance in the range of $190 to $210 million. Note that we've included over 90% of the $56.6 million deferred CIRCLE medical revenue in our 2025 guidance. This IFRS revenue associated with CIRCLE medical deferral will have a close to 100% contribution, as I noted, to Adjusted EBITDA, and it's important to consider when evaluating the company's performance. We expect CIRCLE medical deferred revenue will be recognized primarily in the matters noted on a quarter-by-quarter basis.
Speaker Change: The matters noted on a quarter by quarter basis note that as of today. The company has already recognized again approximately $6 7 million of this deferred revenue our guidance does not include contribution from the $24 $5 million in delayed earnings on CRH until this matter is resolved through a more exhaustive.
Hamed Shahbazi: Note that as of today, the company has already recognized, again, approximately $6.7 million of this deferred revenue.
Hamed Shahbazi: Our guidance does not include contribution from the $24.5 million in delayed earnings on CRH until this matter is resolved through a more exhaustive collection effort performed by Change Healthcare or formal agreement with Change Healthcare itself as it relates to their advances. Our guidance includes 100% consolidation of HealWell financials starting in Q2 2025 as per IFRS control requirements. We're currently expecting this will add approximately $120 million in annual revenue with positive adjusted EBITDA contributions. Note that WELL's voting interest in HealWell is currently approximately 69%, pardon me, and its economic ownership of HealWell is currently at approximately 37%.
Speaker Change: Collection effort performed by change healthcare or formal agreement with change healthcare itself as it relates to their advances our guidance includes 100% consolidation of <unk> financials, starting in Q2, 2025, asper Ifr's control requirements.
Speaker Change: We're currently expecting this will add approximately $120 million in annual revenue with positive adjusted EBITDA contribution.
Speaker Change: Note that wells voting interest in fewer wells currently approximately 40% to 69% pardon me and its economic ownership. If you will is currently at approximately 37%.
Hamed Shahbazi: Our guidance reflects healthy organic growth expectations in our Canadian operation.
Speaker Change: Our guidance reflects healthy organic growth expectations in our Canadian operations.
Hamed Shahbazi: Importantly, this guidance does not include any unannounced acquisitions, and we have a very strong pipeline with a strong balance sheet.
Speaker Change: Importantly, this guidance does not include any unannounced acquisitions, and we have a very strong pipeline with a strong balance sheet.
Hamed Shahbazi: Separately, while this is not part of our official 2025 guidance, we're pleased to note that with the strong outlook and fundamentals of our Canadian business, we are now targeting to reach $800 million in revenues and $100 million in adjusted EBITDA in Canada alone by the end of next year. We're confident in our fundamentals and outlook and are expecting 2025 to be a great year for the company with record revenue EBITDA and cash flow.
Speaker Change: While this is not part of our official 2025 guidance. We're pleased to note that with the strong outlook and fundamentals of our Canadian business. We are now targeting to reach eight.
Speaker Change: $800 million in revenues and $100 million and adjusted EBITDA in Canada alone by the end of next year.
Speaker Change: We're confident in our fundamentals and outlook and are expecting 2025 to be a great year for the company with record revenue EBITDA and cash flow.
Hamed Shahbazi: I'd now like to provide the listeners today with an overall view of what WELL Health family will look like in the future. We anticipate WELL will be comprised of three operating subsidiaries and two publicly listed entities. The three operating subsidiaries will include Canadian Clinics, WELL Health USA, and our cybersecurity business unit. The two publicly listed entities will include WELLSTAR and HealWell.
Speaker Change: I would now like to provide our listeners today with an overall view of what will health family will look like in the future. We anticipate well will be comprised of three operating subsidiaries and two publicly listed entities. The three operating subsidiaries will include Canadian clinics, well health USA and our cyber security business unit.
Speaker Change: The two publicly listed entities will include well star.
Speaker Change: And heal well.
Hamed Shahbazi: HealWell is currently listed on the TSX under the ticker AIDX and WELLSTAR is expected to debut with an IPO on the TSX by early 2026. WELL Health is the largest shareholder in each of Wellstar and HealWell. We have a majority ownership position in Wellstar and a majority voting share ownership in HealWell. Both WELLSTAR and HealWell are independent companies that will have their own capital allocation strategies, fundraising plans and acquisition opportunities. However, both WELLSTAR and HealWell will continue to work very closely with WELL and our clinical footprint in Canada.
Speaker Change: Hill Wells currently listed on the PSX under the ticker <unk> and well start is expected to debut with an IPO on the <unk> by early 2026.
Speaker Change: Well health as the largest shareholder in each of Westar and <unk>, we have a majority ownership position in <unk> and the majority voting share ownership and heal well.
Speaker Change: Both westar and <unk> are independent companies that will have their own capital allocation strategies fundraising plans and acquisition opportunities. However, both will start you will will continue to work very closely with well and our clinical footprint in Canada.
Hamed Shahbazi: Now that we've covered off some of the key results, I'd like to cover off a key, a few key topics.
Speaker Change: Now that we've covered off some of the key results I'd like to cover off the key a few key topics.
Hamed Shahbazi: We'll do a deeper dive into HealWell, our WellSTAR and BuyCanadian theme, our Canadian Clinics Update, and as well an update on the Wisdom Circle sale process. Let's start with HealWell. We're very pleased with the progress of HealWell AI, a company that redeveloped a plan and took a major leadership role in recapitalizing and relaunching 18 months ago after we acquired its MCI clinics and formed a pure play AI software company. With HealWell's recent acquisition of Orion Health, completed on April 1, HealWell is building the world's leading company in healthcare data interoperability and artificial intelligence. In conjunction with HealWell's acquisition of Orion Health, WELL increased its holdings in HealWell to an approximate 37%.
Speaker Change: We will do a deeper dive into <unk>.
Speaker Change: Our well start by Canadian.
Speaker Change: Theme, our Canadian clinics update.
Speaker Change: And as well an update on the wisdom circle sale processes.
Speaker Change: Let's start with <unk>, we're very pleased with the progress of <unk> AI company that we developed a plan and took a major leadership role and recapitalizing and Relaunching 18 months ago. After we acquired its Mci clinics and formed a pure play AI software company with <unk> recent acquisition of Orion Health.
Speaker Change: <unk> on April one <unk> building, the world's leading company in health care data interoperability and artificial intelligence.
Speaker Change: In conjunction with <unk> acquisition of Orion Health will increase its holdings in fuel well to an approximate 37%.
Hamed Shahbazi: Economic Interest, and an approximate 69% voting interest. As a result, the company will begin to fully consolidate. deal well in its financial results starting in Q2 2025. We're very excited about the progress made at HealWell and its future. HealWell's commercial success is underscored by its partnerships with seven of the top 10 pharmaceutical companies in the world. This robust client base reflects its ability to deliver unparalleled value to the health care ecosystem. HealWell is not just revolutionizing patient care through AI, but through building a scalable and sustainable platform that is shaping the future of health care.
Speaker Change: Economic interest and an approximate 69% voting interest.
Speaker Change: As a result, the company will begin to fully consolidate.
Speaker Change: Well in its financial results starting in 2020 Q2 2025.
Speaker Change: We're very excited about the progress made as you are well and its future qol's commercial successes underscored by part it's partnerships with seven of the top 10 pharmaceutical companies in the World. This robust client base reflects its ability to deliver unparalleled value to the health care ecosystem.
Speaker Change: It's not just revolutionizing patient care through AI, but through building, a scalable and sustainable platform that is shaping the future of health care.
Hamed Shahbazi: HealWell's strategic acquisition of Orion Health significantly enhanced HealWell's market position, accelerating its path to profitability. Orion Health was generating approximately $100 million in annualized revenue run rate, the majority of which is coming from large enterprise staff with strong operating EBITDA margins. Orion Health provides significant strategic benefits to HealWell and now WELL, which includes, one, financial benefits of its strong recurring revenues, two, significant scale benefits as Orion Health currently services a total population of 150 million lives throughout all of its customers worldwide. 3. A significant distribution opportunity for HealWell's AI offerings, as well as WellSTAR's best-in-class provider, FocusTech.
Speaker Change: He'll well strategic acquisition of Orion health significantly enhanced Youll wells market position accelerating its path to profitability Orion health was generating approximately $100 million annualized revenue run rate. The majority of which is coming from large enterprise SaaS with strong operating EBITDA margins Orion.
Speaker Change: <unk> provides significant strategic benefits to heal well and now well, which includes one financial benefits of its strong recurring revenues to significant scale benefits as Orion health currently services, a total population of 150 million lives throughout all of its customers worldwide.
Speaker Change: Three significant distribution opportunity for hill wells AI offerings as well as <unk> best in class provider focus tech and for significant data science and data interoperability expertise.
Hamed Shahbazi: And 4. Significant data science and data interoperability expertise. Before public sector clients can use AI, which they really want to do in any meaningful manner, they must get their data normalized and organized and achieve interoperability. This is not an easy task, and Orion is one of the best in the world at helping public sector healthcare organize their data. This is a very important thematic to be aware of.
Speaker Change: For public sector clients can use AI, which they really want to do in any meaningful manner. They must get their data normalize and organize and achieve interoperability. This is not an easy task and Orion is one of the best in the world at helping public sector health care groups organize their data.
Speaker Change: This is a very important thematic to be aware of.
Hamed Shahbazi: This map shows how HealWell has strengthened its position with the Orion Health acquisition as the global leader in AI-driven healthcare solutions. Today, Orion operates across 11 countries, delivering cutting-edge software solutions to public and private sector customers globally. Its technology is deployed across more than 70 sites globally, supporting healthcare systems that collectively manage, again, over 150 million patient records. This global presence combined with deep integration into healthcare ecosystems positions HealWell for sustained growth. The company's solutions are powered by 500 global employees working out of 15 global offices in 11 countries. As a leader in AI-driven healthcare solutions, HealWell has large, referenceable customers globally.
This map shows how <unk> has strengthened its position with the Orion health acquisition as the global leader in AI, driven health care solutions today Orion operates across 11 countries delivering cutting edge software solutions to public and private sector customers globally.
Speaker Change: Technology is deployed across 70 sites.
Speaker Change: More than 70 sites globally supporting health care systems that collectively manage again over 150 million patient records.
Speaker Change: This global presence combined with deep integration into health care ecosystems positions <unk> well for sustained growth.
Speaker Change: The company solutions are powered by 500 global.
Speaker Change: Employees working out of 15 global offices in 11 countries.
Speaker Change: As a leader in AI, driven healthcare solutions <unk> has large reference hirple customers globally, its ability to execute at scale as evidenced in the successful deployment of digital care records, or Dci and digital front door or DSP solutions for major health care systems across the world.
Hamed Shahbazi: Its ability to execute at scale is evident in the successful deployments of digital care records, or DCR, and digital front door, or DFD, solutions for major healthcare systems across the world. Some of these customer deployments include, for example, in Saudi Arabia, where HealWell is and Orion is powering the world's largest digital care records deployment globally, covering 35 million people. This system integrates data from over 5,000 governmental and private health care providers, creating a single comprehensive view of each patient's medical history. In Ontario, Canada, HealWell or Orion has delivered a digital front door platform serving 15 million people and is now executing on the deployment of a unified digital care records system to enhance clinical interoperability.
Speaker Change: These customer deployments include for example, in Saudi Arabia, where <unk> is.
Speaker Change: And O'brien is powering the world's largest digital health.
Speaker Change: Care records deployment globally, covering 35 million people. This system integrates data from over 5000 governmental and private health care providers create.
Speaker Change: Creating a single comprehensive view of each patient's medical history.
Speaker Change: Ontario, Canada, Colwell or Orion has delivered a digital front door platform, serving 15 million people and is now executing on the deployment of a unified digital care record system to enhance clinical interoperability.
Hamed Shahbazi: In Abu Dhabi, Orion has deployed its first ever digital care records solution in the Middle East, seamlessly connecting 100% of all hospitals, clinics and pharmacies to improve patient outcomes through real-time data integration. This is an exceptional solution and result of which there are very few examples in the world. And in the United States, HealWell is delivering or Orion is delivering digital care records for state and regional health information exchanges or HIEs in Maine, Minnesota, Pennsylvania, New Mexico, North Dakota and Idaho, reinforcing its presence in the U.S. health care ecosystem.
Speaker Change: Darby.
Speaker Change: Brian has deployed its first ever digital care record solution in the middle East seamlessly connecting 100% of all hospitals clinics and pharmacies to improve patient outcomes through real time data integration.
Speaker Change: Exceptional solution and result of which there are far.
Speaker Change: A few examples in the world.
Speaker Change: And in the United States, Youll wells, delivering or Orion delivering digital health care Records for state and regional health information exchanges or <unk> in Maine, Minnesota, Pennsylvania, New Mexico, North Dakota, and Idaho, reinforcing its presence in the U S health care ecosystem.
Hamed Shahbazi: And now I'd like to talk a little bit about the strategic spin-out of WELLSTAR. During Q4, we created WELLSTAR, a WELL subsidiary, which we intend to spin out as a publicly listed, high-growth, profitable, pure-play, software-as-a-service, or SaaS healthcare technology company, which would still be majority owned by WELL. WELLSTAR is a technology platform that powers WELL's clinical ecosystem. WELLSTAR is dedicated to empowering healthcare providers with innovative solutions that enhance patient care and optimize operational efficiency. WellSTAR addresses the diverse needs of the health care providers by streamlining care delivery, integrating fragmented care systems, reducing burnout, and improving patient care and experiences and outcomes.
Speaker Change: And now I'd like to talk a little bit about the strategic spin out of well start.
Speaker Change: During Q4, we created well start a well subsidiary, which we intend to spin out as a publicly listed high growth profitable pure play software as a service or SaaS health care Technology company, which would still be majority owned by well.
Speaker Change: <unk> is the technology platform that powers wells clinical ecosystem, while star is dedicated to empowering health care providers with innovative solutions that enhance patient care and optimize operational efficiency.
Speaker Change: <unk> addresses the diverse needs of the health care providers by streamlining care delivery integrating fragmented care systems.
Speaker Change: Juicing, burnout and improving patient care.
Speaker Change: And experiences and outcomes.
Hamed Shahbazi: There are over 4,000 clinics across the country that are customers of WellSTAR. And as we noted earlier, over 40 percent of all providers in the country touch the platform in some way. WellSTAR is currently on a 70 million dollar annual revenue run rate, generates 80 percent gross margin, is operating as a rule of 40 or better business with 20 percent organic growth and 29 percent adjusted EBITDA margins before shared service. WELLSTAR is already one of the most relevant and consequential companies in the Canadian healthcare technology landscape and has firmly established itself as a de facto market leader in technology enabling clinicians across the country.
Speaker Change: There are over 4000 clinics across the country that are customers of well start and as we noted earlier over 40% of all providers in the country touch the platform in some way well start is currently on a $70 million annual revenue run rate generates 80% gross margin is operating as a rule of 40 or better business with 20% organic growth.
Speaker Change: 29% adjusted EBITDA margins before show services well.
Speaker Change: Star is already one of the most relevant and consequential companies in the Canadian Health care technology landscape and has firmly established itself as a de facto market leader and technology, enabling clinicians across the country.
Hamed Shahbazi: We believe WellSTAR will be a very strong IPO candidate on the TSX main board sometime in early 2026. We continue to believe that pursuing a spin out and public listing for WELLSTAR will accelerate the growth of the company, providing it with attractive cost of capital for M&A purposes and position it to be a multi-billion dollar company itself in the pure healthcare software vertical. We've already completed the first step in the WealthStar GoPublic plans, which was to add significant capital to WealthStar's balance sheet so it can execute on its acquisition plans. As such, during Q4, WealthStar closed on a $50.4 million equity placement entirely supported by Maurer Investment Management, Edgepoint Wealth Management and Pender Fund Capital Management, three very reputable investment firms with a strong.
Speaker Change: We believe we will start will be a very strong IPO candidate on the PSX mainboard sometime.
Speaker Change: In early 2026, we continue to believe that pursuing a spin out and public listing for well star will accelerate the growth of the company, providing it with attractive cost of capital for M&A purposes and position it to be a multibillion dollar company itself in the pure <unk>.
Speaker Change: Health care software vertical.
Speaker Change: We've already completed the first step in the all-star go public plans, which was to add significant capital to <unk> balance sheet. So it can execute honest acquisition plans as such during Q4, well start closed on a $54 million equity placement entirely supported by malware investment management edge point wealth management.
Speaker Change: And Pender fund capital management, three very reputable investment firms with a strong.
Hamed Shahbazi: track record of investing in Canadian technology leaders. WELL and WELLSTAR management also participated in this financing to fund WELLSTAR's pre-spin-out growth objective. WELL did not issue any shares as part of this transaction.
Speaker Change: Track record of investing in Canadian technology leaders.
Speaker Change: Well and well start management also participated in this financing to fund well starts pre spin outgrowth objectives, well did not issue any shares as part of this transaction.
Hamed Shahbazi: Step two for WELL Health and WELLSTAR is to acquire scale in its business. WELLSTAR completed acquisition of two healthcare technology companies, MicroQuest and Bluebird, which boosted WELLSTAR's annualized revenue to approximately 70 million. WellSTAR has a compelling pipeline of target acquisitions in its portfolio. Before WELLSTAR does its public listing, our plan is to build additional scale by completing additional acquisitions that will position WELLSTAR towards $100 million in annual revenue. Step three is the actual IPO, which we expect to occur in the next three to four quarters. As a majority voting shareholder, we expect to continue consolidating the financial results, as I mentioned earlier.
Speaker Change: Two for well healthy and well start is to acquire scale its business well start completed.
Speaker Change: The acquisition of two health care technology companies, micro quest, and Bluebird, which boosted <unk> annualized revenue to approximately $70 million.
Speaker Change: <unk> has a compelling pipeline of target acquisitions.
Speaker Change: It's in its portfolio before well start does its public listing our plan is to build additional scale by completing additional acquisitions that will position will start towards the $100 million.
Speaker Change: In annual revenues.
Speaker Change: Step three is the actual IPO, which we expect to occur in the next three to four quarters.
Speaker Change: The majority voting shareholder we expect to continue consolidating the financial results as I mentioned earlier.
Hamed Shahbazi: We're now pleased to report that the bi-Canadian sentiment is presenting significant strategic advantages for WELL Health, especially in the WellStart and HealWell areas of our business. As policymakers across the federal and provincial levels increasingly prioritize domestic health care solutions, WELL Health is uniquely positioned to benefit from this shift and further solidify our leadership in Canadian health care ecosystems. In recent months, we've had a 200% increase in the size of our public sector pipeline as our deep-rooted presence in the Canadian health care landscape has led to unprecedented engagement from various different federal and provisional governments. We're currently seeing over 70 opportunities across Canada, representing $300 million in deal value.
Speaker Change: We're now pleased to report that the by Canadian sentiment is presenting significant strategic advantages for well health, especially in the wells start <unk> areas of our business as policymakers across the federal and provincial levels increasingly prioritize domestic health care solutions Wilhelm.
Speaker Change: Uniquely positioned to benefit from this shift and further solidify our leadership in Canadian health care ecosystem.
Speaker Change: In recent months, we've had a 200% increase in the size of our public sector pipeline is our deep rooted presence in the Canadian health care landscape has led to unprecedented engagement from various different federal and provincial governments.
Speaker Change: We are currently seeing over 70 opportunities across Canada, representing $300 million in deal value.
Hamed Shahbazi: In the past, despite there being high-quality technology vendors available in Canada, public sector procurement managers were mostly buying U.S. products and services to power many aspects of the Canadian healthcare economy. The recent U.S. tariff policies have completely changed this perspective and accelerated the demand for homegrown digital health solutions. This policy driven shift has created new revenue opportunities for WELL Health as one of the few companies in the country with the technology depth to deliver on large projects, particularly in the areas such as digital health infrastructure, AI powered solutions, virtual care and primary care enablement. Our acquisition of Orion Health through HealWell has further solidified our position as a leading provider of provincial health.
Speaker Change: In the past despite there being high quality technology vendors available in Canada public sector procurement managers were mostly buying U S products and services to power many aspects of the Canadian health care ecosystem.
Speaker Change: The recent U S tariff policies are completely changed this perspective and accelerated the demand for homegrown digital health solutions. This policy driven shift has created new revenue opportunities for well health as one of the few companies in the country with the technology depth to deliver on large projects, particularly in the areas.
Speaker Change: As such as digital health infrastructure, AI powered solutions virtual care and primary care enablement.
Speaker Change: Our acquisition of O'brien health through heel will has further solidified our position as a leading provider of provincial health.
Hamed Shahbazi: information exchange platforms, while the expansion of OceanMD's e-referral platform in BC and other provinces is streamlining patient care coordination. Our extensive network of health care providers, as well as our own and operated network, which is the largest in the country, positions us very well to support policymakers in their efforts to enhance patient outcomes. We also believe that WELL will benefit from a reduction in engagement from U.S. companies internationally. Note that with Orion Health, we now have boots on the ground in 11 countries globally and will be working with Orion to sell more of our WellSTAR capabilities internationally.
Speaker Change: Information exchange platforms, while the expansion of Ocean MDC referral platform in BC and other provinces is streamlining patient care coordination.
Speaker Change: Our extensive network of health care providers as well as our owned and operated network, which is the largest in the country.
Speaker Change: <unk> us very well to support its policymakers in their efforts to enhance patient outcomes.
Speaker Change: We also believe that well will benefit from a reduction in engagement from U S companies internationally.
Speaker Change: Note that with Orion health, we now have.
Speaker Change: Boots on the ground in 11 countries globally, and we will be working with Orion to sell more of our wells start capabilities internationally. This is a unique catalyst not previously considered before within wealth business.
Hamed Shahbazi: This is a unique catalyst not previously considered before within WELL's business.
Hamed Shahbazi: The third theme I'd like to discuss this morning is the success of our Canadian business. As you can see from these charts, the historical performance of our Canadian clinics business has been exceptionally strong. Canadian clinics achieved revenue of $319 million in 2024, handily beating our previous revenue guidance of $300 million. Over the past four quarters, our Canadian clinics business has exceeded 50% compound annual growth rate. Adjusted EBITDA attributable to our Canadian clinic business has grown at a CAGR of 44% and achieved $40.7 million in 2024. Our Canadian clinics network has grown to 210 clinics at the end of 2024, compared to 167 at the end of 2022.
Speaker Change: The third theme I'd like to discuss this morning is the success of our Canadian business as you can see from these charts. The historical performance of our Canadian clinics business has been exceptionally strong Canadian clinics achieved revenue of $319 million in 2024 handily, beating our previous revenue guidance of $300 million.
Speaker Change: Over the past four quarters, our Canadian clinics business had exceeded 50% compound annual growth rate.
Speaker Change: Adjusted EBITDA attributable to our Canadian clinic business has grown at a CAGR of 44% and achieved $47 million in 2024.
Speaker Change: Our Canadian clinics network has grown to 210 clinics at the end of 2024 compared to 167 at the end of 2023.
Hamed Shahbazi: We expect this number will continue to increase in 2025 as we have a significant M&A pipeline. In Q4, we continued executing on our strategic growth plan through the expansion of our clinic network. We acquired 20 clinics, generating over $30.8 million in annual revenue. This does not include our affiliate clinic acquisition from Jack Nathan Health, which would increase our total clinic count to 57, including both owned and affiliate clinics. We also, our owned and operated clinic network welcomes 111 new health care providers in Q4, further strengthening our capacity to deliver high quality care. We continue this momentum in Q1, in which we acquired 11 clinics generating $31.5 million in annual revenue and added 71 providers.
Speaker Change: We expect this number will continue to increase in 2025, as we have a significant M&A pipeline.
Speaker Change: In Q4, we continued executing on our strategic growth plan through the expansion of our clinic network, we acquired 20 clinics generating over $38 million in annual revenue. This does not include our affiliate clinic acquisition from Jackson from Jack Nathan Health, which would increase our total clinic count to 57, including both.
Speaker Change: Owned and affiliated clinics.
Speaker Change: We also are owned and operated clinic network welcomed 111, new health care providers in Q4 further strengthening our capacity to deliver high quality care.
Speaker Change: We continued this momentum in Q1.
Speaker Change: And which we acquired 11 clinics generating $31 $5 million in annual revenue and added 71 providers.
Hamed Shahbazi: With a diversified clinic strategy and a growing physician base and a scalable expansion model, we're well positioned to drive long-term growth and operational efficiency.
Speaker Change: With a diversified clinic strategy and a growing physician base and is scalable expansion model, we are well positioned to drive long term growth and operational efficiency.
Hamed Shahbazi: And now a little bit about our M&A pipeline. We have a very healthy pipeline of clinic acquisitions, opportunities which we believe is directly correlated with the challenges doctors are feeling in the marketplace. We continue to focus on acquiring Canadian clinics under both our absorption model and acquisition model. Our current pipeline of Canadian clinic acquisition opportunities is very active. In Canadian clinics, we currently have five signed LOIs representing five clinics and approximately $31 million in annual revenue. In total, across the entire organization, including Canadian clinics, WELLSTAR and WELLUSA, we currently have seven signed LOIs, representing approximately $40 million in annualized revenue.
Speaker Change: And now a little bit about our M&A pipeline, we have a very healthy pipeline of clinic acquisitions.
Speaker Change: Opportunities, which we believe is directly correlated with the challenges doctors are feeling in the marketplace.
Speaker Change: We continue to focus on acquiring Canadian clinics under both our absorption model and acquisition model.
Speaker Change: Our current pipeline of gating clinic acquisition opportunities is very active and Canadian clinics. We currently have five signed loi's, representing five clinics and approximately $31 million in annual revenue.
Speaker Change: In total across the entire organization, including Canadian clinics, well, starting well USA. We currently have seven signed loi's, representing approximately $40 million in annualized revenue.
Hamed Shahbazi: We have a very large pipeline of target acquisitions that we are in a pre-LOI stage with. We have more than 130 targets engaged, representing over $390 million in annual revenue. This pipeline includes more than 130 clinics.
Speaker Change: We have a very large pipeline of target acquisitions that we are in a pre LOI stage with we have more than 130 targets <unk>.
Speaker Change: Engaged representing over $390 million in annual revenue.
Speaker Change: This pipeline includes more than 130 clinics.
Hamed Shahbazi: Our Canadian business and including our Canadian clinics and WELL Star businesses are doing exceptionally well and is outperforming in many ways that I've already mentioned earlier on this call. Our pre-tax unlevered ROIC or return on invested capital in Canada is expected to rise. driven by growth, acquisition, integration and cost optimization. Meanwhile, our adjusted EBITDA continues to be driven by organic and inorganic growth. Now, looking a little bit more closely at our heroics, Wellstar currently operates at a heroic of 11 percent. The WELL Health Diagnostic Network has achieved a historic growth rate of 12%. Note that the Diagnostic Network has a lower heroic than our primary care acquisitions because we had not done any tuck-in acquisitions after acquiring the platform in 2021 until quite recently.
Speaker Change: Our Canadian business and including our Canadian.
Speaker Change: Got it.
Speaker Change: Clinics and will star businesses are doing exceptionally well and is outperforming many in many ways that I've already mentioned earlier on this call our pre tax Unlevered <unk>.
Speaker Change: Grow it or return on invested capital in Canada is expected to rise.
Speaker Change: Driven by growth acquisition integration and cost optimization. Meanwhile, our adjusted EBITDA continues to be driven by organic and inorganic growth.
Speaker Change: Now looking a little bit more closely at our ROIC well start currently operates at a ROIC of 11%.
Speaker Change: The World Health diagnostic network has achieved a historic ROIC of 12%.
Speaker Change: Note that the diagnostic network has a lower ROIC and our primary care acquisitions, because we have not done any tuck in acquisitions. After acquiring the platform in 2021 until quite recently, we expect that the diagnostic our ROIC to improve as we just completed our first diagnostics tuck in with the acquisition of Alberta based <unk>.
Hamed Shahbazi: We expect that the diagnostic heroic to improve as we just completed our first diagnostics tuck-in with the acquisition of Alberta-based Seahealth in late 2024. The historical relic in our primary care business is approximately 22 percent, demonstrating our ability to create value. We expect our Canadian clinic ROIC figure should improve given that our costs have reduced and our ability to execute on clinic transformation has improved in recent years. This is also demonstrated by the primary care ROIC for the last three years at approximately 30% per year. for each of the three-year cohorts. The three-year primary care ROIC also benefits from the absorption model, which we started post-COVID and has an extremely high ROIC.
Speaker Change: Health in late 2024.
Speaker Change: Historical ROIC in our primary care business is approximately 22% demonstrating our ability to create value.
Speaker Change: We expect our Canadian clinic, ROIC figure should improve given that our costs have reduced and our ability to execute on clinic transformation has improved in recent years.
Speaker Change: This is also demonstrated by the primary care ROIC for the last three years at approximately 30% per year.
Speaker Change: For each of the three year cohorts. The three year primary care ROIC also benefits from the absorption model, which we started post COVID-19 and has an extremely high ROIC.
Hamed Shahbazi: WELL's high pre-tax unlevered ROIC metrics indicate that the company's consistently creating returns well above its cost of capital, demonstrating the company's disciplined approach to capital allocation and operational execution.
Speaker Change: Wells high pre tax Unlevered ROIC metrics indicate that the company has consistently creating returns well above its cost of capital demonstrating the company's disciplined approach to capital allocation and operational execution.
Hamed Shahbazi: Turning to adjusted EBITDA growth for WELL Canada, as you can see from the graph on the right, Our year-over-year adjusted EBITDA of WELL Canada, including Canadian clinics and WELLSTAR, has been accelerating while it achieved Annual adjusted EBITDA of $56.3 million in 2024, a 22% increase as compared to last year. In 2025, we're expecting our Adjusted-EBGYNT candidate to experience an over 25% growth, inclusive of both organic and inorganic growth. We're very confident in our Canadian business and are now targeting over $100 million in adjusted EBITDA in Canada alone by the end of next year. We think this is very much an achievable goal and our focus is making it a reality.
Speaker Change: Turning to adjusted EBITDA growth for well, Canada as you can see from the.
Speaker Change: The graph on the right.
Speaker Change: Our year over year, adjusted EBITDA, while Canada, including Canadian clinics, and Westar has been accelerating while achieved.
Speaker Change: Annual adjusted EBITDA of $56 3 million in 2024, or 2020 or 22% increase.
Speaker Change: As compared to last year.
Speaker Change: In 2025, we are expecting our adjusted EBITDA candidates experienced in over 25% growth inclusive of both organic and inorganic growth.
Speaker Change: We're very confident in our Canadian business and are now targeting over $100 million and adjusted EBITDA in Canada alone by the end of next year.
Speaker Change: We think this is very much an achievable goal and our focus in making it a reality.
Hamed Shahbazi: The fourth theme I'd like to talk about is our current strategic review process of WISP and Circle Medical. First of all, on WISP, we concluded the first phase of our strategic review process for WISP, resulting in the receipt of numerous proposals from prospective acquirers. While interest in WISP was significant, the board has determined that none of these proposals adequately reflected WISP's exceptional operational performance, accelerating growth trajectory, and substantial market opportunity in women's health care. Throughout the review process, WISP continued to demonstrate strong business fundamentals with consistent revenue growth and operating margin expansion. This performance reinforces the board's conviction in WISP's long-term value potential beyond what was reflected in the proposals received.
Speaker Change: The fourth theme I'd like to talk about is our current strategic review process of waste and circle medical first of all on West. We concluded the first phase of our strategic review process for <unk>, resulting in the receipt of numerous proposals from prospective acquirers.
Speaker Change: While interest in width was significant the board has determined that none of these proposals adequately reflected west exception with exceptional operational performance accelerating growth trajectory and substantial market opportunity in women's health care.
Speaker Change: Throughout the review process with continued to demonstrate strong business fundamentals with consistent revenue growth and operating margin expansion. This performance reinforces the board's conviction and with long term value potential beyond what was reflected in the proposals received the company and its advisers continue to actively work on the strategic review.
Hamed Shahbazi: The company and its advisors continue to actively work on the strategic review process, and we remain committed to our strategy of divesting the company's U.S. digital assets in order to allocate more capital to Canada. and will continue to provide updates as appropriate.
Speaker Change: Process and we remain committed to our strategy of divesting the companies use digital assets in order to allocate more capital to Canada.
Speaker Change: And we will continue to provide updates as appropriate.
Hamed Shahbazi: Operationally, WISP had a very strong 2024 with record annual revenue of $101 million, an increase of 30% from 2023, and it achieved record adjusted EBITDA of $5 million in 2024, a 235% increase from the previous year. WISP is performing very well, and we're expecting WISP to have improved EBITDA performance in 2025, which we believe may assist in attracting a more favorable valuation.
Speaker Change: Operationally, we had a very strong 2024 with record annual revenue of $101 million, an increase of 30% from 2023 and it achieved record adjusted EBITDA of $5 million in 2020 for a 235% increase from the previous year with this performing very well and we're expecting to have.
Speaker Change: Improved EBITDA performance in 2025, which we believe may assist in attracting a more favorable valuation.
Hamed Shahbazi: Moving on to Circle Medical. We've already discussed Circle extensively on this call, so we won't go into it too much further. But we will remind shareholders that last year we engaged a global investment bank to consider strategical terms for Circle Medical. We're still relatively early in the process, which has recently slowed down due to the regulatory inquiry. Nonetheless, we're still very committed to continue to move forward on the sale of Circle Medical and currently have a number of discussions and engagement occurring with prospective buyers. We do not necessarily believe that the regulatory matter needs to be fully resolved before a sale takes place.
Speaker Change: Moving onto circle medical we've already discussed circle extensively on this call. So we won't go into too much further, but we will remind shareholders that last year, we engaged a global investment bank to consider strategic alternatives for circle medical we're still relatively early in the process, which has recently slowed down due to the regulatory inquiry Nonetheless.
Speaker Change: Very committed to continue to move forward on the sale of circle medical and currently have a number of discussions and engagement occurring with prospective buyers. We do not necessarily believe that the regulatory matter needs to fully to be fully resolved before ACL takes place. This is of course after consultation with U S legal advisers.
Hamed Shahbazi: This is, of course, after consultation with U.S. legal advisers. We continue to believe that unlocking the value from WISP and CERCLE could result in significant cash benefit to WELL, which we would use in a variety of ways, including redeploying the capital into our expanding Canadian clinic footprint.
Speaker Change: We.
Speaker Change: To believe that unlocking the value from within circle could result in significant cash benefit to well, which we would use in a variety of ways, including redeploying the capital into our expanding Canadian clinic footprint.
Speaker Change: Yeah.
Eva Fong: And now I will pass the mic over to Eva Fong. Thank you, Hamed. Overall, our fiscal year 2024 results were positive, excluding the revenue recognition impact Hamed discussed earlier on the call.
Speaker Change: And now I will pass the.
Speaker Change: Mike over to <unk>.
Speaker Change: Thank you Amit overall, our fiscal year 2024 results were positive excluding the revenue recognition impact discussed earlier on the call.
Eva Fong: As Hamed has already covered revenue and adjusted EBITDA results, I'll focus on WELL's net income. WELL reported a net income of $29.1 million, or $0.13 per share, in 2024, an increase of 75% as compared to a net income of $16.6 million, or $0.00 per share, in 2023. The higher net income this fiscal year was primarily driven by the fair value gains on the company's investment in Hillwell. From the graph, you can see that the IFRS revenue recognition impact had a material impact on our 2024 net income figure. Excluding these impacts, WELL was on track to achieve approximately $90 million in net income.
Speaker Change: As Tom has already covered revenue and adjusted EBITDA results I'll focus on wells net income.
Speaker Change: While reported net income of $29 1 million or <unk> 13 per share in 2024, an increase of 75% as compared to a net income of $16 6 million of zero cents per share in 2023.
Speaker Change: Higher net income this fiscal year was primarily driven by the fair value gains on the Companys investment in Hayward.
Speaker Change: From the graph you can see that the <unk> revenue recognition impacts had a material impact on our 2024 net income figure excluding.
Speaker Change: These impacts.
Speaker Change: <unk> was on track to achieve approximately $90 million in net income.
Eva Fong: Now looking at our balance sheet as at the end of Q4 2024, WELL ended 2024 with a solid balance sheet. As of December 31st, 2024, WELL had cash and cash equivalents of $131.7 million. WELL continues to be in good standing and fully compliant with all covenants related with its two credit lines, J.P. Morgan in the U.S. and Royal Bank in Canada. The debt from the two credit lines was approximately $292.4 million in Canadian dollars as of December 31st, 2024. Our balance sheet is strong and getting stronger as we continue to grow our free cash flow generation capabilities.
Speaker Change: Now looking at our balance sheet as at the end of Q4 2024, well ended 2024 with a solid balance sheet.
Speaker Change: As at December 31, 2024, while had cash and cash equivalents of $131 7 million.
Speaker Change: Welcome to use to be in good standing and fully compliance with all covenants related with his two credit lines J P. Morgan in the U S and Royal Bank in Canada.
Speaker Change: But that's one to two credit lines was approximately $292 4 million in Canadian dollars.
Speaker Change: As of December 31, 2024.
Speaker Change: Our balance sheet is strong and getting stronger as we continue to grow our free cash flow generation capabilities. We should see 2025 result, again in a record year of free cash flow generation.
Eva Fong: We should see 2025 results again in a record year of free cash flow generation.
Eva Fong: I'm also very pleased to report that we have the cash and available resources to continue to fund our M&A program. This is true for Canadian clinics, Wellstar, and CLH Medical, where substantially all our M&A is funded. Pipeline is focused on.
Speaker Change: I'm also very pleased to report that we have the cash and available resources to continue to fund our M&A program.
Speaker Change: This is true for Canadian clinics, while star and CRH medical where substantially all our M&A.
Speaker Change: Our pipeline is focused on.
Eva Fong: That is my financial update and I now turn the call back to Hamed.
Hamish: That is my financial update and I'll now turn back time to call back to Hamish.
Hamed Shahbazi: Thank you, Eva. You know, in final here, I'm very excited about our outlook for this year, which we expect to achieve record revenue, record adjusted EBITDA, record net income and record free cash flow. First of all, I want to reiterate that our 2025 guidance for revenue of $1.4 to $1.45 billion and adjusted EBITDA of $190 to $210 million. This guidance does not include any in-and-out acquisitions, and we have a tremendous pipeline of potential acquisitions that could significantly boost guidance upwards. In addition, we have not included any amounts from the $24.5 million in delayed earnings on CRH until the claims affected are collected or there is formal agreement with Change Healthcare.
Hamish: Thank you Eva.
Speaker Change: Oh.
Speaker Change: In in final here I'm very excited about our outlook for this year, which we expect to achieve record revenue record adjusted EBITDA record net income and record free cash flow.
Speaker Change: First of all I want to reiterate that our 2025 guidance for revenue of one four to $1 45 billion and adjusted EBITDA of $190 million to $210 million.
Speaker Change: This guidance does not include any unannounced acquisitions, and we have a tremendous pipeline of potential acquisitions that could significantly boost guidance upwards.
Speaker Change: In addition, we've not included any amounts from the $24 $5 million in delayed earnings on CRH until the claims affected are collected or there is a formal agreement with change healthcare.
Hamed Shahbazi: Our guidance also includes fully consolidated financial statements from HealWell, as we noted. We're also very excited with the potential IPO of WellSTAR, we're expecting WellSTAR to reach 100 million in annual revenues by 2026. WellSTAR will continue to be a guiding light in the delivery of technology solutions Technology and Solutions to Healthcare Providers. Despite the challenging economic and backdrop of the geopolitical instability of tariff, we remain committed to the sale process of our U.S. digital assets. These businesses continue to be desirable given their historical growth rates, and they both reflect the future of healthcare as telemedicine businesses.
Speaker Change: Our guidance also includes fully consolidated financial statements from <unk> as we noted.
Speaker Change: We're also very excited.
Speaker Change: With the potential IPO of well star, we're expecting will start to reach $100 million in annual revenues by 2026, we'll start we'll continue to be a guiding light in the delivery of technology solutions.
Speaker Change: Yeah.
Speaker Change: Knowledge solutions to health care providers despite the.
Speaker Change: The challenging economic.
Speaker Change: Backdrop of the geopolitical instability of tariff we committed we remain committed to the sale processes of our U S digital assets.
Speaker Change: These businesses continue to be desirable given their historical growth rates and they both reflect the future of health care as telemedicine businesses divestment of these assets will allow us to.
Hamed Shahbazi: Divestment of these assets will allow us to redeploy the capital in attractive ways, as we discussed. Our Canadian business, including Canadian Clinics and WellSTAR, is outperforming. And we have many tailwinds in the Canadian health care market driving and supporting the business, including the strong buy Canadian sentiment that we talked about. And as I noted earlier, we're expecting WELL Canada's adjusted EBITDA to grow by at least 25% in 2025. Our longer-term view of the Canadian market remains bullish, again, as I noted, with our two-year goal of achieving $800 million in revenue and $100 million in adjusted EBITDA inclusive of acquisitions just in Canada.
Speaker Change: To redeploy the capital in attractive ways, as we discussed our Canadian business, including Canadian clinics, and well start is outperforming and we have many tailwind in the Canadian healthcare market driving and.
Speaker Change: In supporting the business, including the strong by Canadian sentiment that we talked about.
Speaker Change: And as I noted earlier, we're expecting well Canada's adjusted EBITDA to grow by at least 25% in 2025.
Speaker Change: Our longer term view of the Canadian market remains bullish again as I noted with our two year goal of.
Speaker Change: Of achieving.
Speaker Change: $800 million in revenue and $100 million and adjusted EBITDA inclusive of acquisitions just in Canada.
Speaker Change: Yeah.
Hamed Shahbazi: And in addition, our WELLSTAR as a technology leader in Canada, we believe its growth will only accelerate with a future IPO.
Speaker Change: Okay.
Speaker Change: And in addition, our well start as a technology leader in Canada.
Speaker Change: We believe its growth will only accelerate with the future IPO.
Hamed Shahbazi: So in summary, we're very pleased with the strengthening fundamentals of our business and look forward to delivering strong results in 2025 and beyond. WELL's growth engine has never been stronger. Our organic growth is operating at its optimal level while we are executing on a very healthy M&A pipeline. We have a strong balance sheet and are well positioned to improve shareholder value. We have a committed and disciplined team to ensure we can execute on our objectives.
Speaker Change: So in summary, we're very pleased with the strengthening fundamentals of our business and look forward to delivering strong results in 2025 and beyond.
Speaker Change: <unk> growth engine has never been stronger organic growth is operating at its optimal level. While we are executing on a very healthy M&A pipeline.
Speaker Change: We have a strong balance sheet and are well positioned to improve shareholder value. We are a committed and disciplined team to ensure we can execute on our objectives.
Hamed Shahbazi: I'd also like to thank WELL's senior management team and all our employees and contractors for their tremendous effort. And in particular, I'd like to thank our team of healthcare practitioners and other frontline workers. continue to provide unbelievable patient care. They remind us every day why we're here, and we're here to support them. I also want to thank you all for joining us on this call and thank our shareholders and investors for their continued support. The capital markets have been very supportive of our vision and have provided us with the funding needed to pursue our goals.
Speaker Change: I'd also like to thank wells senior management team and all our employees and contractors for their tremendous effort and in particular I would like to thank our team of health care practitioners and other frontline workers, who continue to provide unbelievable patient care.
Speaker Change: Remind us every day why we're here and we're here to support them.
Speaker Change: I also want to thank you all for joining us on this call and thank our shareholders and investors for their continued support the capital markets have been very supportive of our vision and it provided us with the funding needed to pursue our goals.
Hamed Shahbazi: finally On behalf of the management team, we sincerely apologize for the lateness of today's report. In my 27 years as a public company CEO, this was the first and only time I personally or we as a company have experienced anything like this. And I am extremely sure it will never happen again. And we very much appreciate your patience with us. We are accountable to you and we look forward to delivering for you.
Speaker Change: Finally.
Speaker Change: On behalf of the management team, we sincerely apologize for the lateness of today's report.
Speaker Change: In my 27 years as a public company CEO. This was the first and only time I personally or we as a company have experienced anything like this.
Speaker Change: And I am extremely sure it will never happen again.
Speaker Change: We very much appreciate your patience with us.
Speaker Change: We are accountable to you and we look forward to delivering for you.
Operator: And with that, we will now open the call to questions.
Speaker Change: And with that we will now open the call to questions. Operator would you. Please help us take questions.
Operator: Operator, would you please help us? Thank you.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by 2. If you are using a speakerphone, please lift the handset before pressing any.
Speaker Change: Thank you.
Ladies and gentlemen, we will now begin the question and answer session should you have questions. Please pass star followed by one on your attached on Fine you will hear from that your hand has been raised.
Speaker Change: Should you wish to decline from the polling process this past.
Speaker Change: Followed by two if you are using a speaker phone please lift the handset before pressing any key.
Operator: One moment, please, for your first question.
Speaker Change: One moment. Please for your first question.
Michael Freeman: And for your first question, comes from Mr. Michael Freeman. From Raymond James, please go ahead. Good afternoon, Hamed, Eva, Tyler. Thanks so much for the extremely thorough overview of your 2024.
Speaker Change: And for your first question.
Speaker Change: Comes from Mr. Michael Freeman.
Speaker Change: From Raymond James Please go ahead.
Speaker Change: Hi, good afternoon Tyler.
Speaker Change: Tyler Thanks, so much for the extremely thorough.
Michael Freeman: I have a question and a follow up both on Circle Medical.
Overview of your 'twenty 'twenty four.
Speaker Change: I have a question and a follow up both on Circle Circle Medical I guess just to start could you describe the service obligation under Ifr asset circle medical didn't meet in order to qualify this revenue for recognition during 2024.
Hamed Shahbazi: I guess just to start, could you describe the service obligation under IFRS that Circle Medical didn't meet in order to qualify this revenue for recognition during 2024? Thanks, Michael, for the question.
Speaker Change: Thanks, Michael for the question.
Hamed Shahbazi: We're not able to go into a significant amount of detail, given that the conversations with the regulators are ongoing, but I can tell you, this is more of an administrative matter in nature. It sort of deals with – because, as you know, we delivered the service, we got paid, but in terms of our compliance with the actual contract, the view was we may have not met the IFRS requirement for recognizing revenue. So we took the very conservative step in order to defer this revenue.
Speaker Change: We're not able to go into a significant amount of detail.
Speaker Change: Given that the conversations with the regulators are ongoing but I can tell you is this is more of an administrative matters in nature.
Speaker Change: Yes.
Speaker Change: It's sort of deals with because as you know we deliver the service we got paid.
Speaker Change: But in terms of our compliance with the actual contract.
Speaker Change: The view is we we may have not met the <unk> requirement for recognizing revenue so.
Speaker Change: So we took the <unk>.
Speaker Change: Very conservative step in order to to defer this revenue.
Michael Freeman: Thank you. Okay, that's helpful.
Speaker Change: Okay. That's helpful. Then men know very quickly.
Hamed Shahbazi: Then now, very quickly, could you provide some color on how you estimated the settlement amount related to the Circle Medical USAO investigation? This is done really with the help of advisors. This is a civil matter. There's a lot of track record in terms of how these things typically go. There's specialized counsel that deals with these sorts of matters. This was an element that we were able to get this advice through advisors. Certainly, these figures were audited. Auditors need to feel comfortable that these settlements were reasonable. Expert feedback was sought in order to substantiate that these are reasonable provisions to be taken.
Speaker Change: Could you provide some color on how you estimated the settlement amounts related to the circle medical Usao investigation.
Speaker Change: This is this is done really with the help of advisors.
Speaker Change: This is a civil matter there is a lot of.
Speaker Change: I guess track record in terms of how these things typically go.
Speaker Change: They're specialized council that deals with these sorts of matters and this was sort of.
Speaker Change: This was an element that that.
Speaker Change: That we were able to get this advice through advisers and certainly these figures were audited.
Speaker Change: And so auditors need to feel comfortable that the settlements were reasonable and and so.
Speaker Change: Experts.
Speaker Change: Kind of feedback was sought in order to substantiate that these are reasonable provisions to be taken.
Michael Freeman: Okay, thank you very much.
Michael Freeman: I'll pass it on.
Speaker Change: Okay. Thank you very much I'll pass it on there.
Speaker Change: Yes.
Rob Koff: And your next question comes from Mr. Rob Koff from Ventum. Please go ahead. Thank you very much. And, you know, we're very pleased with the underlying performance. It's just such a shame, but very pleased with the fundamental growth. Thank you, Rob. We feel the same way.
Speaker Change: Thank you and your next question comes from Mr Rock costs from Jim. Please go ahead.
Speaker Change: Thank you very much and we're very pleased with the underlying performance is just such a shame, but very pleased with the fundamental growth.
Speaker Change: Thank you, Rob we feel the same way.
Hamed Shahbazi: Now, in terms of the by Canadian, could you perhaps elaborate a bit more in terms of the 70 plus opportunities and the deal value of 300 million? Is that $300 million, the total deal value across, say, an average of the five-year term? Are these deals lumpy, like some are $50 million, and what sort of timing? Yes, yes. So we've effectively, in fact, that was sort of the lower part of our range. I will tell you that the deal pipeline is, we were conservative here when we sized the potential lengths of the different contracts. It's more like 300 to 500 million, depending on how far some of these contracts would go out.
Speaker Change: No no.
Speaker Change: In terms of the the buy Canadian could you, perhaps elaborate a bit more in terms of the 70 plus opportunities in the deal value of $300 million like is that $300 million.
Speaker Change: The total deal value across a an average of the five year term are these.
Speaker Change: Deals lumpy like some are 50, and what sort of timing.
Speaker Change: Yes, yes, so we have effectively.
Speaker Change: In fact that was sort of the lower part of our range I will tell you that that the deal pipeline is.
Speaker Change: We were conservative here, when we sized the potential length of the different contracts, it's more like $300 million to $500 million, depending on how far some of these contracts would go out but yes, they effectively involve different types of implementations.
Hamed Shahbazi: But yeah, they effectively involve different types of implementations of technology at the public sector level, mostly provincial, working with provincial vendors. Of course, there's also federal procurement that occurs through the Infoway entity, which is always promoting and driving digital health kind of advancement in Canada. So clear across all those opportunities, we're seeing at least 70 plus opportunities.
Speaker Change: Of technology at the public sector level, mostly provincial.
Speaker Change: Working with provincial vendors of course, there is also.
Speaker Change: Federal procurement that occurs through.
Speaker Change: The info way.
Speaker Change: Entity, which is which is always promoting and driving digital health.
Speaker Change: Kind of advancement in Canada, so clear across all of those opportunities. We are seeing at least 70 plus opportunities mind. You. This does not include a Ryan. This is really important to note because the Orion already has very significant installations.
Hamed Shahbazi: Mind you, this does not include Orion. This is really important to note, because Orion already has very significant installations within Canada. In fact, it's the largest market that they operate in of all their different countries. And so they are incredibly prominent in terms of their work in not only Ontario, but also Alberta and a number of other provinces. So we think that the door opens here for, again, more opportunity for non-US vendors, of which there's not many of them that can deliver these types of solutions. So we're talking about more of Ocean MD's type products and services, our Ambien Scribe services, various different digital products and services across the country.
Speaker Change: Within Canada in fact, it's the largest market that they operate in of their of their.
Speaker Change: Of all the different countries.
Speaker Change: And so they are incredibly prominent in terms of their working not only in Ontario, but also Alberta and a number of other programs provinces. So we.
Speaker Change: We think that the door opens here for <unk>.
Speaker Change: More and more opportunity for non U S vendors.
Speaker Change: Of which there's not many of them that can that can deliver these types of solutions. So we're talking about more ocean that these type of products and services, our ambient scribe services various different.
Speaker Change: Digital products and services across the country.
Rob Koff: Thank you very much. Thank you.
Speaker Change: Thank you very much.
Daniel Rosenberg: And our next question is from Daniel Rosenberg from Paradigm. Please go ahead. Hi, thanks for taking my question. I wanted to continue on the theme of circle.
Speaker Change: Thank you and our next question is from Daniel Rosenberg from paradigm. Please go ahead.
Daniel Rosenberg: Alright, Thanks for taking my question I wanted to continue on the theme of circle I was wondering.
Hamed Shahbazi: I was wondering, given the delayed revenue, if you had to make any changes to process or operations at the division? And has it changed your thoughts on, you know, the growth potential within the asset as it's been a big driver in the past? And, you know, effectively, what that value, what kind of value you could crystallize from that?
Daniel Rosenberg: Given the delayed revenue if you had to make any changes to process or operations at the division and has it changed your thoughts on the growth potential within that asset as it's been a big driver.
Daniel Rosenberg: In the past and effectively what that value what kind of value you could crystallize from that asset as well.
Hamed Shahbazi: Yeah, look, we don't anticipate any sustained impact over the long term. In the short term, we expect growth to slow a bit as the company focuses on reviewing compliance and transitioning to a new revenue cycle management vendor. This was one of the real keys that resulted in some administrative challenges. This work will position the company for the next phase of growth. And look, there continues to be strong interest in Circle. We believe the current compliance focus may delay things a little bit, but we don't think that it necessarily has to have a big impact on value.
Daniel Rosenberg: Yeah look weak.
Daniel Rosenberg: We don't anticipate any sustained impact.
Daniel Rosenberg: Over the long term in the short term, we expect growth to slow a bit as the company focuses on.
Daniel Rosenberg: Reviewing compliance and transitioning to a new revenue cycle management vendor. This was this is one of the real keys that debt.
Daniel Rosenberg: That was it.
Daniel Rosenberg: <unk> and some of these administrative challenges.
Daniel Rosenberg: This will.
Daniel Rosenberg: This work will position the company for the next phase of growth.
Daniel Rosenberg: Look there continues to be strong interest in circle. We believe the current compliance focus may delay things a little bit, but we don't think that it necessarily has to have a big impact on value.
Daniel Rosenberg: Okay, good to hear.
Daniel Rosenberg: And then just turning to the guidance, those are some big numbers, even when I think of, you know, all the activity that you guys have executed on with Orion and HealWell, etc. So I was curious if you could dive a little deeper on, you know, it sounds like the Canadian business is humming, just the drivers and the confidence you have in being able to achieve those. Yeah, I will, I will say, you know, our, our elevated organic growth is one factor. And then of course, our deep M&A pipeline. I think we are very much expecting over the next couple years that we will have some liquidity from our U.S.
Daniel Rosenberg: Okay. Good to hear and then just turning to the guidance.
Daniel Rosenberg: Those are some big numbers, even when I think of all the activity that you guys have executed on with Orion and you know while et cetera. So I was curious if you could dive a little deeper on it.
Daniel Rosenberg: It sounds like the Canadian business is humming and just the drivers and the confidence you haven't been able to achieve those results.
Daniel Rosenberg: Yes, I will say.
Daniel Rosenberg: Our elevated organic growth is one factor.
Daniel Rosenberg: And then of course, our deep M&A pipeline.
Daniel Rosenberg: Think I think we are very much expecting over the next couple of years that we will have.
Hamed Shahbazi: assets, and that will help us. The pipeline is effectively more than we can prosecute right now with the cash resources that we have, which are strong. And so we'll continue to be quite industrious and committed and demonstrative of what you're seeing quarter to quarter. That growth will continue with these sort of continued tuck-ins. But as liquidity occurs, we do think that that will just, again, help us drive additional opportunities. We also see some chunkier opportunities in the landscape, and we're very much bearing down on those opportunities. And we think that there's some opportunities here to potentially close some bigger deals while we go after that long tail in a very systematic manner.
Daniel Rosenberg: Some liquidity from our U S assets and that will help us.
Daniel Rosenberg: The pipeline is.
<unk> more than we can prosecute right now.
Daniel Rosenberg: With the cash resources that we have which are which are strong. So we will continue to be quite.
Daniel Rosenberg: Quite industrious and committed and demonstrative of.
Daniel Rosenberg: What you are seeing quarter over quarter, you know that that growth will continue with the sort of continued tuck ins but.
Daniel Rosenberg: As as liquidity occurs we do think that.
Daniel Rosenberg: That will just.
Daniel Rosenberg: And then help us drive additional opportunities we also see some chunkier opportunities in the landscape.
Daniel Rosenberg: We are very much bearing down on those opportunities and we think that there are some opportunities here to the potentially.
Daniel Rosenberg: Close some bigger deals while we go after that long tail.
Daniel Rosenberg: In a very.
Daniel Rosenberg: Systematic matter.
Daniel Rosenberg: Thank you so much for that.
Speaker Change: Thanks for that and if I could squeeze one more in I was interested in your comments around wells far in pursuing kind of global opportunities.
Daniel Rosenberg: And if I could squeeze one more in.
Daniel Rosenberg: I was interested in your comments around WellSTAR and pursuing kind of global opportunities. Are there any specific products that you think scale better internationally? Or how are you thinking about the product suite at WellSTAR and those Yeah, absolutely. Well, look, we think OceanMD, we've always thought OceanMD has tremendous international potential. I mean, with just the quality of product and the product portfolio that we have there with the e-referral, e-order, and just kind of the whole provider network tools there. These are exceptional products. There's a reason why they're winning a lot of the RFPs that they participate in.
Speaker Change: Are there any specific products that you think scale better.
Speaker Change: Internationally or.
Speaker Change: How are you thinking about the product suite at <unk> and those plans.
Speaker Change: Yeah, absolutely look we think ocean M. D. We've always thought ocean MD has tremendous international potential.
Speaker Change: With just the quality of product and the product portfolio that we have there with the E referral E order in.
Speaker Change: Kind of the whole provider network tools. There. These are exceptional products as a reason why they are winning a lot of the rfps that they participate in and I think they would.
Hamed Shahbazi: And I think they would resonate very well with international audiences that need these products as they build more accountable healthcare ecosystems. And look, we've just never tried because we've been focused on on Canada, because just just going out and building that global sales force and, you know, getting into the right places. I mean, that's what Orion's done over a, I'll say, I think, close to 30 year program.
Resonate very well with international audiences that need these products as they build more accountable health care ecosystems.
Speaker Change: And look we've just never tried because we've been focused on <unk>.
Speaker Change: Canada, because just just going out and building that global sales force and <unk>.
Speaker Change: Getting into the right places.
Orion has done over a.
Hamed Shahbazi: Thank you. period in building the types of relationships that they have with the NHS and these very significant countries, France, Spain, Saudi Arabia, United Arab Emirates, Australia, New Zealand. These are all candidates for us. There's no doubt that we have opportunities to have them resell some of our capabilities, which we think are meaningful.
Speaker Change: I think close to 30 year.
Speaker Change: Period in building the types of relationships that they have with the.
Speaker Change: The NHS.
Speaker Change: He is very significant countries, France, Spain.
Speaker Change: Saudi Arabia, United Arab Emirates are Australia, and New Zealand.
Speaker Change: These are all candidates for us I mean, there's no doubt that we have opportunities to.
Speaker Change: Two to have them resell some of our capabilities, which we think are.
Speaker Change: Are meaningful.
Kevin: Thanks for taking my questions.
Kevin: I'll pass the line. Thank you.
Speaker Change: Thanks for taking my questions I'll pass the line.
Hamed Shahbazi: And our next question is coming from Kevin from Scotiabank. Please go ahead. I think it looks like if you exclude the HealWell contributions and then the Circle Medical deferrals and compare margins, you know, on a normalized basis from 24 to 25, it looks like they're going down a little bit. I just want to clarify if that's the way you're thinking about it and what might be some of the reasons for a slight dilution year over year. Yeah, that's a good, that's a good question. I think if you look at, we're not expecting significant EBITDA from HealWell.
Speaker Change: Thank you and our next question is coming from Kevin <unk> from Scotiabank. Please go ahead.
Speaker Change: I think it looks like if you if you exclude the.
Speaker Change: <unk> contributions and then the circle medical deferrals and compare margins.
Speaker Change: On a normalized basis from 24 to 25, it looks like they're going down a little bit just want to clarify that the way youre thinking about it and what might be the.
Speaker Change: Some of the reasons for a slight slight dilution year over year.
Speaker Change: Yes.
Speaker Change: That's a good that's a good question I think if you look at where.
Hamed Shahbazi: And so I think that may be part of it. Also, I think, as you know, as we grow organically, and as we take on these absorptions, you know, there's sometimes a timing difference in, you know, relative to our profitability on those. So I generally don't think that we will have a significant difference over time in terms of our margins. In fact, I think margins on a whole will improve over time, because of the higher margin revenues coming in through WellStar and HealWell as those platforms continue to gain momentum.
Speaker Change: Not expecting significant EBITDA for <unk>, and so I think that may be part of it also I think as you know as we grow organically and as we take on these absorptions.
Speaker Change: Sometimes a timing difference.
Speaker Change: Relative to.
Speaker Change: Our profitability on those so.
Speaker Change: Generally don't think that we will have a significant difference over time in terms of our margins in fact, I think margins on a whole will improve over time because of the higher margin revenues coming in through wall, starting <unk> as those platforms continue to gain momentum.
Hamed Shahbazi: makes sense. Maybe just one more, again, on the guidance on the top line, just the range, can you talk about sort of the assumptions there broadly, what gets to the low end, the high end? And, you know, where do you where do you see the best opportunities for sort of outperformance towards the high end? Yeah, there's a lot going on in our guidance, as you can see, I think that the that the real potential for outperformance really comes from Canada, frankly, I think, I think, and this is why we're sort of throwing out that two year target, we think it's very demonstrative of our confidence and the opportunities that we're seeing for capital allocation.
Speaker Change: Makes sense, maybe just one more again on the guidance on the top line just a range can you talk about sort of the assumptions there broadly what gets you to the low end the high end and where do you where do you see the best opportunities for sort of outperformance towards the high end.
Speaker Change: Yes, Theres a lot going on in our guidance as you can see I think that the that the real potential for outperformance really comes from Canada, frankly, I think I think this is why.
Speaker Change: We're sort of throwing out that two year target, we think it's very.
Speaker Change: Demonstrative of our confidence.
Speaker Change: And the opportunities that we're seeing for capital allocation.
Hamed Shahbazi: And so I would think that, you know, as some of that M&A you know, kind of gets gets fulfilled, you know, we could see and I think some of the some of the margin profile of that M&A could also impact things. So I would say that depending on that M&A, I could see, I could see, you know, to be, you know, certainly being at the top end or even exceeding that top end of the range.
Speaker Change: And so I would think that as some of that M&A.
Speaker Change: You know kind of gets gets fulfilled we could see and I think some of the.
Speaker Change: Some of the margin profile of that M&A could also impacting so I would say that depending on that M&A I could see.
Speaker Change: I could see.
Speaker Change: Certainly being at the top end or even exceeding that top end of the range.
Hamed Shahbazi: Okay, okay, thanks a lot. I'll leave it there.
Hamed Shahbazi: And I also wanted to say thank you for, you know, giving the full color and description for everything that happened in the quarter on the accounting changes. It was much appreciated. So thank you, actually, for helping people understand that this is a very noisy quarter and hopefully everyone recognizes that this does not impact our fundamentals. Our patient visits grew, our fundamentals are strong, and in some of these administrative matters, we will, you know, we will have full control of those and are working very hard at that. And certainly, hopefully people recognize the CRH matter is really something that was completely out of our hands.
Speaker Change: Okay. Thanks, a lot I'll leave it there and I also wanted to say thank you for giving the full color and description for everything that happened in the quarter on the accounting changes much appreciate it.
Speaker Change: So thank you actually for helping people understand that this is a very noisy quarter and hopefully everyone recognizes that this does not impact our fundamentals our patient visits grew.
Speaker Change: Our fundamentals are strong.
Speaker Change: And some of these administrative matters we will.
Speaker Change: We will have full control of those.
Speaker Change: And are working very hard at that and certainly hope hopefully people recognize the CRH matter is really something that was completely out of our hands a lot of people are dealing with.
Hamed Shahbazi: A lot of people are dealing with these collection issues, and this is just the fact of our collection policy and revenue recognition policy under IFRS that we had to take these steps. But again, there is some upside to the guidance range as well coming from, you know, future potential revenue recognition from collections. So thank you.
Speaker Change: These collection issues and this is just the <unk>.
Speaker Change: Fact of our collection policy and revenue recognition policy under <unk> that we had to take these steps, but again there is some upside to the guidance range as well coming from.
Speaker Change: Future potential revenue recognition from collections. So thank you. Thank you to all the analysts and all your support.
Hamed Shahbazi: Thank you to all the analysts and all your support.
Operator: That concludes the question and answer session for today.
Speaker Change: That concludes the question.
Hamed Shahbazi: I will now hand the call back to Mr. Hamed Shahbazi for the closing comment. Please continue. Again, we want to really thank everyone for joining us today and again apologize for the delay in getting this report out. We look forward to speaking to you again, I think in about a month, and we look forward to a much more orderly process. And again, have a wonderful day and be well. Thank you.
Speaker Change: A question and answer session for today I will now hand, the call back to Mr. Hammond Chimpanzee Friday closing comments. Please continue.
Again, we want to really thank everyone.
Speaker Change: Joining us today and again apologize for the delay in getting this report out we.
Speaker Change: We look forward to speaking to you again I think in about a month and we look forward to a much more orderly.
Speaker Change: Process and again have a wonderful day and be well. Thank you.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.